I have 1980-2021 data for US personal income (nominal, unchained) and I need to convert all those years to chained 2012 dollars, and then convert it from nominal to real.
I looked up the formulas and understand that I need something called a Fisher index for each pair of years (1980-1981, 1981-1982, and so on), and that this Fisher index is some average of the Laspeyres index and the Paasche index (which I still don't quite understand).
My question has 3 parts:
- Can I just use an inflation calculator to equate each of those yearly values to 2012 dollars?
- Will that mess me up when I then try to use CPI to convert from nominal to real afterward? Am I just using CPI twice? (i.e., Is it already converted to real when I convert to chained 2012 dollars?)
- If not, how would I convert to real afterward? I only know how to convert YOY growth rates from nominal to real, not convert physical hard values / dollars.
I'm really new to this, so I appreciate in advance all the help to simplify this process. Thank you!